Reorganizing business processes in the organization can be necessary when we notice problems.
However, we should not try to reorganize all business processes at once. That’s why it starts with the most urgent ones.
This is determined by answering the following questions:
- Which process disrupts the smooth running of the work?
- Which process has the most problems?
- Which of the processes is most important for winning customers?
- Which of the processes can be done most cheaply and easily?
Following is an introduction to the processes. It is necessary to understand how they are fulfilled, to what extent they can be distinguished so that the unnecessary ones can be eliminated.
Then an inquiry is made and an analysis of the wishes of the clients so that they can be maximally satisfied with the offered products. The next step is to determine the level of the improvement project.
There are three options here – it can be compared with similar projects, with other existing and existing solutions or to look for a new level that has not existed in other companies.
The cost of designing the processes must be less than the benefits it brings. As few people as possible who are not enslaved to old ideas and views should be involved in the improvement of the processes and should be united in teams.
That is why he relies on working with external experts because they have a view on the problems on the part of the client. In addition, a diagnosis should be made of the actual condition of the enterprise by measuring the following factors – the quality of production, time for the production cycle, cost, cost of products, and more.
Regarding costs, it is crucial to obtain information about their amount not only at the end of the process but also in the cycle itself. Thus, measures can be taken to minimize costs.
Process performance = (quality errors) x (cycle duration) x (process costs)
For the design and improvement of the processes, it is necessary to determine whether the problem is in the object or the subject of the enterprise. It starts from the most problematic place.
This sector is decomposed into constituent elements and it is sought exactly where the problem is and the reason for lagging behind the others. Once the problem element is defined, the processes taking place in it are established. There are different methods for improving the processes:
Improvement by merging adjacent operations. For the implementation of this method, certain conditions must be met: the operations must be adjacent and the duration of the combined operations cannot be greater than the value of the largest, because it determines the stroke of the production line.
When merging the operations, the duration of the new operation must be equal to the existing mergers.
Improving the processes by breaking down the operations into smaller components. There are three options for this method – the duration of the previous operation to be equal to, greater than, or less than the sum of the duration of the new operations.
In the first case, mechanical dismemberment is observed and labor intensity remains the same. In the second option, we have less labor intensity, caused by increased labor productivity, which can be achieved either by additional mechanization or by increasing the dexterity of workers as a result of training or others. In the latter case, the increase in time can be advantageous if it is offset by fuller use of time for other operations, to increase productivity overall.
Improvement by reducing the duration of individual operations is a method that applies mainly to the longest operations. Consistent establishment of limiting operations must be taken into account.
As well as reducing the time to perform manual operations by increasing dexterity with training and practice. Technology needs to be replaced by more productive ones by calculating the cost of this and their impact on the unit price.
Improvement by using the method of multi-operational service. It is necessary to cover the manual time of one machine with the machine time of all others included in the complex for simultaneous service.
The number of machines depends on the skills of the workers operating them. There are two options for implementing the method:
Manual work only – only the difference between the specified measure and the actual duration of an operation can be used.
The use of the ratio between machine and manual work can be added, which leads to greater efficiency.
Improvement by applying all possible approaches: this is the most applied method in practice.
When improving the processes in the management of the enterprise, the whole management of components must be decomposed. The elements are labor, objects of labor, means of labor, technology, organization, and structure.
The organization is the most effective combination of personal and material elements of the system to achieve a goal. The management structure is the arrangement and coordination of individual units, both in management and in production.
Other elements of the subject are the principles, methods, and functions of management, information systems, and flows, management decisions, style and way of working, as well as the working hours of the manager, and last but not least the culture of management.
Of great importance to design the improvement of management decision processes are the preparation, taking, and implementation of a system of targeted actions.
The management decision affects the interests of the whole system, which involves significant costs for materials, labor, and financial resources. Stages in solving a problem situation are:
- Problem occurrence
- Identify the problem
- Awareness of the nature of the problem
- Solution of the problem
- Execution of the decision
Components of the problem-solving process
From the moment the problem occurs to its establishment, time passes. The length of this period is extremely important for the effectiveness of the decision. It is shortened through the organization of information and training of management staff. Components of the problem-solving process are:
- Analysis of the primary material
- Evaluation and grouping of input data
- Development of options
- Choosing the most profitable of them
Control is a factor for increasing or decreasing the effect of the decision taken, and hence of the management itself and ultimately of the production and economic activity.
The reduction of time from the moment of occurrence to the moment of establishing the problem with obtaining the relevant information must be controlled, which leads to a reduction of losses.
Phases of implementation of reengineering projects:
Identification of the main processes that will be improved
Designation of the main person in charge
Designation of those responsible for the individual processes
Forming a team
Introduction to the content and analysis of existing processes
Establishing the condition and getting acquainted with it
Identify improvement issues, taking into account customer requirements
Creating projects to improve processes
Implementation of projects
Identification of the problems arising from the specific implementation and identification of measures to eliminate possible shortcomings, Reference: “Business process reengineering”, https://mstsnl.net/business-process-reengineering/
Project implementation team
The project implementation team consists of a leader, a project manager, a team, and a governing body.
Criteria for building a system for measuring process management are the intersections of processes and flexibility in the organization of labor. The guidelines for creating a horizontally oriented organizational structure are the following:
- Rationalization of the hierarchy – elimination or merging of redundant or unproductive units
- Subordinating the achievement of goals and processes above all to the requirements for effective teamwork
- The close connection of goal setting and meeting customer needs
- Linking management tasks with executive activity
- Improving contacts with customers and suppliers
- Increasing incentives for better teamwork and individual work
Features of teamwork in the production itself:
Internal distribution of work
Observance and optimization of the individual processes, deadlines, and connections
Participation in the improvement of the respective processes in the production
Compensation for possible irregularities in production and optimal use of the company’s assets
Conditions of interchangeability of team members
Providing production with material and labor resources
Regulation of the regime of rest, work, and planning of absences
Maintaining a reserve of capacity and equipment
Participation of the team in activities to improve production, content, quality, and working conditions.
In personnel management, there is a change in qualifications, which consists of the ability to implement innovative solutions and act to protect the interests of the enterprise. It requires a responsible attitude towards people, mutual trust in common work, and the ability to communicate. A rational organization of the workplace and in the whole sector is created and implemented.
The ‘just-in-time’ method is used. To achieve the development of the teams, there is a need for a collective spirit in carrying out the respective production and economic activities. Communications are improved and individual employees are supported for professional growth.
In reengineering, supply and marketing management is closely linked to the seller-buyer relationship. Key points are:
- Building a long-term partnership
- Establishing the price of the product on mutually beneficial terms and joint efforts to reduce costs
- Sale and purchase strategy within the general management
- Approaching the market and the customer
- Preliminary accurate identification of all changes during the preparation of the production
- Constant quality management
- Synchronization of supply with production
- Constant preliminary quality control
Long-term cooperation leads to common management in terms of quality and costs, the realization of innovative potential, and mutual work in eliminating problem areas.
This leads to a reduction in production costs after its implementation, ie. a reduction of marriage. The execution of the processes on both sides and their implementation in parallel is accelerated. Efficient, logistical and information systems are being developed.
To ensure the quality of the production of the products and the management of the processes, first of all, attention is paid to the phase of preparation of the production.
The emphasis here is on quality in development processes and marketing research for the wishes of customers at low cost. To ensure the quality of the production process, automation is used according to the needs and optimization of the parameters of each process in the current production. To improve supply, a comprehensive cost, cost, process management, and change in management culture are needed.
Successful management behavior is based on the following conditions – reducing the levels of management, stimulating self-responsibility and self-initiative, conducting continuous discussions on the effectiveness of management, integrating planning between sectors, standards to be developed with employees, and building a culture of quality.
Examples of companies that have implemented reengineering:
Ford has reorganized its business to produce quality cars. They achieved this goal by placing barcodes on all parts of the car and scanning the assembly line so that they could identify the deficiencies in time. In this way, they have saved millions of dollars for warranty service.
General Motors has implemented a plan to merge its countless desktop systems into one. This process consisted of consolidating desktop systems, network operating systems, and solution generation programs into a single technology platform. This saved GM 20% on maintenance costs, 4% on hardware, and 55% on software licenses.
Reengineering is not just a new method, but a complete concept of work and action, valid for all enterprises and organizations, not only for the economic system. This approach is the key to success that every company strives for, but does not offer a miracle. Rather, reengineering professes a new way of thinking that changes the views and goals of organizations, focusing mostly on the wishes of customers and can only be achieved through hard work and effort.